How Denmark, England, Estonia, France, Germany, and the USA Pay for Variable, Specialized and Low Volume Care: A Cross-country Comparison of In-patient Payment Systems

Document Type : Original Article

Authors

1 Department of Health Care Management, Technische Universität Berlin, Berlin, Germany

2 European Observatory on Health Systems and Policies, Brussels, Belgium

3 HelloBetter, Berlin, Germany

4 The Urban Institute, Health Policy Center, Washington, DC, USA

5 Danish Institute for Applied Social Sciences Research, Copenhagen, Denmark

6 Danish Cancer Society Research Centre, Copenhagen, Denmark

7 Centre for Health Economics, University of York, York, UK

8 The Estonian Parliament, Tallinn, Estonia

9 Poverty, Health and Nutrition Division (PHND), International Food Policy Research Institute (IFPRI), Washington, DC, USA

10 School of Medicine, University of St. Gallen, St. Gallen, Switzerland

Abstract

Background 
Diagnosis-related group (DRG)-based hospital payment can potentially be inadequately low (or high) for highly variable, highly specialized, and/or low volume care. DRG-based payment can be combined with other payment mechanisms to avoid unintended consequences of inadequate payment. The aim of this study was to analyze these other payment mechanisms for acute inpatient care across six countries (Germany, Denmark, England, Estonia, France, the United States [Medicare]).

Methods 
Information was collected about elements excluded from DRG-based payment, the rationale for exclusions, and payment mechanisms complementing DRG-based payment. A conceptual framework was developed to systematically describe, visualise and compare payment mechanisms across countries.

Results 
Results show that the complexity of exclusion mechanisms and associated additional payment components differ across countries. England and Germany use many different additional mechanisms, while there are only few exceptions from DRG-based payment in the Medicare program in the United States. Certain areas of care are almost always excluded (eg, certain areas of cancer care or specialized pediatrics). Denmark and England use exclusion mechanisms to steer service provision for highly complex patients to specialized providers.

Conclusion 
Implications for researchers and policy-makers include: (1) certain areas of care might be better excluded from DRG-based payment; (2) exclusions may be used to incentivize the concentration of highly specialized care at specialized institutions (as in Denmark or England); (3) researchers may apply our analytical framework to better understand the specific design features of DRG-based payment systems.

Keywords


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Articles in Press, Corrected Proof
Available Online from 16 April 2022
  • Receive Date: 23 June 2021
  • Revise Date: 06 April 2022
  • Accept Date: 15 April 2022
  • First Publish Date: 16 April 2022